When it comes to hardware, Apple only
has one legitimate competitor in the smart phone market -- Palm.
Palm's Pre is the only smartphone besides the iPhone to support
multi-touch, and its also the only other smartphone to be able to be
able to easily sync with iTunes. Both of these assets
reportedly came thanks in part to the inside knowledge former Apple
engineers brought to Palm.

Apple, which has poached employees
employees from Palm in the past (including during the development of
the various iPods and iPhone), nonetheless, was not to happy about
the launch of the Pre. It tried to block the phone out of
iTunes only to see Palm outmaneuver it again and let the Pre back
in.

Back in 2007, Apple's Chief Executive Office,
Steve Jobs, reached out to former Palm CEO Ed Colligan and proposed a
moratorium on the two companies stealing each other's employees.
Mr. Colligan reportedly rejected Mr. Job's proposal, saying that it
was not only wrong, but "probably illegal".

Palm's
smartphone team is headed by Jon Rubinstein, a former Apple veteran
who had headed the company's pivotal iPod unit. Mr. Rubenstein
was promoted
to Palm's CEO in June, succeeding Mr. Colligan.

Steve Jobs
would not comment on whether he proposed a secret arrangement with
Palm. He would only say that Apple has more patents and money
than Palm if the companies go to war legally. He perhaps was
referring to Apple's patent
on multi-touch technology, which it has threatened to sue
Palm and others with in the past.

If Mr. Jobs did propose
such an arrangement, it appears it would likely be illegal.
According to Donald Russell, an antitrust lawyer who worked at the
Justice Department for more than two decades before going into
private practice in Washington, "It's a form of competition that
is usually protected by antitrust laws that prohibit agreements that
restrict competition."

Apple and Palm, according to a
Reuters source, are under investigation by the U.S. Justice
Department for collusion in hiring. Neither company would
acknowledge that they were being investigated, though.

If
Apple did reach out to Palm for such an arrangement, it would also
have been a rather ironic move as Apple itself has poached employees
from many other tech giants over the years. Most recently,
Apple hired IBM's Mark Papermaster to replace the departing Tony
Faddell as iPod team leader. IBM fought
the move, saying Mr. Papermaster violated the terms of his
contract. Apple and IBM have since reached a settlement,
allowing Mr. Papermaster to go to work at Apple.